Woodside Natural Gas, the Australian company that has proposed a permanent liquefied natural gas (LNG) terminal in Santa Monica Bay, has told officials it wants to suspend work on the OceanWay project Draft EIS/EIR (environmental impact statement and environmental impact report) for approximately six months to down- size and improve the project.

In a follow-up letter dated November 21st to Deepwater Standards Division project manager Roddy Bachman, Woodside vice president of development Rob Male requested that “work on the draft EIS/EIR be suspended as soon as practical to avoid unnecessary work, and to insure that the draft EIR/EIS reflects all of the project’s beneficial features and modifications.”

“We believe the modifications under review by Woodside will result in a streamlined and improved project,” Male’s letter stated. “They need, however, to be developed further to facilitate their evaluation in the draft EIR/EIS. We expect to conclude this work in the second half of 2009 and will submit an updated project description at that time.”

The November 21st letter contained information that updated a September 9th letter to Bachman.

In that September 9th letter, Male stated, “Woodside has determined that only one tie-in point — at the Southern California Gas pipeline at the intersection of Arbor Vitae Street and Aviation Boulevard — will be required to accomplish the business purposes of the project.”

References to Stages 1, 2 and 3 of development are no longer valid as there will now only be two stages of development; all references to Stage 1 should now be to “initial operation,” all references to Stage 2 can be ignored, and all references to Stage 3 should now be to “full development,” Male wrote.

In the November 21st letter, Male commented, “Specifically, we anticipate we will be able to work with a smaller capacity regasification ship and supporting infrastructure. This will reduce the environmental footprint of the project.

“We also are updating other portions of the application to reflect additional information, such as the description of alternative onshore access sites, to avoid or minimize potential environmental and community impacts.

“These efforts are consistent with the objectives of the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA) to reduce impacts where feasible. In addition, we continue to seek and receive input from the community, elected officials and other stakeholders that we will be taking into consideration in our update.

“To fully understand the potential benefits of the modifications, it will also be appropriate to update the lifecycle greenhouse gas analysis.”

Woodside expects to file a revised project description as an amendment to the existing application in the second half of next year, and the rest of the schedule will depend on the U.S. Coast Guard, the City of Los Angeles and the other public agencies reviewing OceanWay, said Woodside vice president of public and government relations Laura Doll.

She said that Woodside is reducing the project’s environmental footprint by eliminating one of the two proposed specially equipped ships that would deliver natural gas to the pipeline for distribution to Los Angeles and shortening the on-shore pipeline route (eliminating Phase 2 of the project), as well as making the remaining ship smaller.

“OceanWay will still be located 27 miles southwest of the Los Angeles coastline and more than five miles beyond existing shipping lanes, far removed from population centers, and will use the proven technology of a buoy system to funnel natural gas from a specially equipped ship into an underwater pipeline for delivery to Los Angeles,” Doll said.

The ship will convert the liquid natural gas to natural gas and the pipelines will carry only natural gas. Southern California, with more than 90,000 miles of natural gas pipelines, has long relied on pipelines to transport its natural gas, Doll noted.

The proposed LNG deepwater port project was originally planned for two processing ships to dock in Santa Monica Bay, 27 miles off the coast of Los Angeles International Airport (LAX), to transfer the natural gas to pipelines leading underwater to Playa del Rey at Vista del Mar, continuing under the El Segundo blue butterfly habitat at Pershing Drive, and proceeding under Westchester Parkway to link up with the first gas transfer station.

The ships would have connected to one of two submerged buoys anchored offshore and delivered natural gas into dual pipelines running along the ocean floor.

After downloading their natural gas cargo, the ships would leave the area and the buoys would sink below the ocean’s surface, with no visibility of any offshore structure when ships are not unloading their cargo, said Woodside representatives.

Although the original application had been evaluated on a fast-track timetable mandated by federal law, the project has been delayed for just over a year while Woodside has worked on requisite plans regarding measurement and mitigation of large amounts of carbon pollution that would create greenhouse gas emissions.

Doll told The Argonaut that OceanWay is the first natural gas importation project to agree to modify its natural gas to provide a cleaner energy supply. Woodside would add nitrogen, the same gas used in many automobile tires, into OceanWay’s natural gas to make it a cleaner energy source.

In response to the contention of opponents that U.S.-produced natural gas would burn cleaner than the natural gas provided by Woodside, Doll said, “We have asked them to correct the record on this point because they are seriously mistaken. The South Coast Air Quality Management District says OceanWay’s gas will burn cleaner than domestically-produced gas.”

On the question of the claim that natural gas in the U.S. is in plentiful supply and importing gas is not necessary, Doll said, “Woodside Natural Gas is planning for the future, not for today. We are looking at the demand for natural gas five years from today because we know that we can’t play catch-up with energy. We need to move ahead with OceanWay now to ensure a clean, safe and secure source of energy for California’s future needs.”

Doll said that the growing population in California and its trillion-dollar economy demand additional energy supplies, but the state’s natural gas supplies are limited, and prices have doubled since 2001. California produces only 15 percent of the natural gas it needs to meet current demand and imports the rest from other states and Canada, she said.

A full report from the California Energy Commission (CEC) discusses the decline of natural gas well productivity in the U.S. and says that California is literally at the end of the interstate pipeline system, competing with growing North American demand, according to Doll.

“The issue is not simply the production of gas, but the competition for that gas,” said Doll. She states that California will have to compete with high-demand eastern states, where natural gas prices are higher, and fast-growing western states, where demand for natural gas is growing.

Opponents of the OceanWay project point to a report, Collision Course: How Imported Liquefied Natural Gas Will Undermine Clean Energy in California, issued by the environmental group Pacific Environment and co-authored by Rory Cox of Pacific Environment and Robert Freehling of the group Local Power.

This report, posted on the Ratepayers for Affordable Clean Energy (RACE) Web site (www.Race forcleanenergy.com), states that “the addition of even one more LNG facility would shackle the state to a new dependence on polluting fossil fuels.”

The report alleges that there is a “revolving door between California’s agencies and the LNG industry.”

In a section of the report titled, “The High Life Cycle Emissions of LNG,” Cox and Freehling contend, “The LNG industry characterizes LNG as a clean fuel, as if it were identical to domestically-produced natural gas. However, LNG emits significant amounts of greenhouse gases, which are commonly attributed to global warming.

“Natural gas is primarily methane and small amounts of heavier hydrocarbon gases, including ethane and propane. When these gases are burned, they produce carbon dioxide and water vapor. Some gas deposits also contain significant amounts of naturally-occurring carbon dioxide. Generally, this carbon dioxide is simply vented into the atmosphere, contributing to global warming.”

The Cox and Freehling report states, “Most North American natural gas deposits serving California have a low carbon dioxide content of two percent or less. In con- trast, the Pacific Rim gas fields potentially serving as sources for LNG, specifically in Australia and Indonesia, have high carbon dioxide content, ranging from ten to 15 percent.

“In addition, imported LNG may have a higher content of ethane and propane, both of which emit more carbon dioxide (14 and 20 percent, respectively) than methane does when burned.

“Furthermore, the LNG life cycle adds a significant amount of greenhouse gas emissions above and beyond those produced by domestic natural gas. Substantial additional greenhouse gas emissions are generated in the LNG extraction, liquefaction, gasification and transport steps. Depending on the quality of the gas and the distance the LNG must travel, LNG crossing the Pacific may add from 12 to 25 percent more greenhouse gas emissions than domestic natural gas.”

Concern over an LNG deepwater port becoming a target for terrorism is another key issue for the public and for political representatives.

The pipeline would be in proximity to Los Angeles International Airport, and some residents and public officials have said that fears of a terrorist attack at LAX are exacerbated by a pipeline that could be blown up, causing massive damage to homes and businesses and the airport itself.

Los Angeles City Councilman Bill Rosendahl, who represents the 11th Council District, which includes LAX, said he is not surprised about the delay and expected it.

“I’m open to hearing about the revisions of the OceanWay project but I’m concerned about the security and environmental issues,” Rosendahl said. “We need to look at America first regarding energy independence in the U.S. and I believe Woodside made a wise decision considering a new administration is coming in with new players in Washington, D.C.

“America needs to stop its foreign reliance and products gathered from the Third World that are causing environmental issues in those countries as well.

“I appreciate the strong support from [Congresswoman Jane] Harman with her concerns about security issues, and we will be watching this project like a hawk.”

Harman — whose 36th Congressional District includes 20 miles of coastline, from Venice to the Port of Los Angeles in San Pedro Bay — told an audience at the LAX Coastal Area Chamber of Commerce Protectors Breakfast October 29th that she opposes the project and hopes that the governor and Los Angeles Mayor Antonio Villaraigosa vote against it.

Los Angeles County Supervisor Don Knabe, who represents the Fourth District, told the chamber’s Marina Affairs Committee last year that he opposed the project and he now reiterates that his opposition to the project remains and that Woodside’s request for a delay doesn’t factor into that opposition.